spookie Posted February 26, 2012 Posted February 26, 2012 What does financial stability mean to you? Is it an equation based on salary, bills, and savings? If so, what do you consider to be "financially stable"? Is it contingent on age? Do you require your partner to be financially stable? Is it something you bring to the table?
FitChick Posted February 26, 2012 Posted February 26, 2012 Steady income with little to no debt. I only have one credit card because I avoid using a debit card as I'd rather have someone steal the bank's money, not mine. Security is important to me and I would be very anxious if I married someone who spent wildly because I'd be responsible for that debt. Spend a little and save a little. Balance in all things. 1
johan Posted February 26, 2012 Posted February 26, 2012 The ability to survive several months without a job. And even then not drawing down savings too far or having to break into retirement funds. Steady, consistent employment. No living paycheck to paycheck, but instead being able to save each month. Little debt except for a mortgage. Always being aware of what is in the bank accounts. And being able to do these things without living like a miser: still having nice things, but not extravagant. I definitely bring it to the table. I'm not sure I expect my partner to be as stable, but I'm not going to be happy about marrying into a lot of debt or fighting with bad spending habits. A compulsive shopper would drive me crazy. 2
OpenBook Posted February 26, 2012 Posted February 26, 2012 Nope, no equation involved and it doesn't depend on age. Just living independently, making one's own way without depending on anyone else, living within one's means.
Star Gazer Posted February 26, 2012 Posted February 26, 2012 Nope, no equation involved and it doesn't depend on age. Just living independently, making one's own way without depending on anyone else, living within one's means. This. Johan's description goes way to far and expects way too much.
johan Posted February 26, 2012 Posted February 26, 2012 Johan's description goes way to far and expects way too much. Which part? I think I just gave a longer description of "living within your means."
Author spookie Posted February 26, 2012 Author Posted February 26, 2012 This. Johan's description goes way to far and expects way too much. How do you think it goes too far? I don't think simple "independence" reflects financial stability. What happens to the independence if one loses one's job?
monkey00 Posted February 26, 2012 Posted February 26, 2012 Someone that isn't a compulsive spender (especially spending on debt such as credit card, and not having the balance in the bank to pay it off), doesn't live paycheck to paycheck, frugal and wise with their finances. Someone that has little or no debt (and is doing a fine job in paying it off). Someone who is able to place a portion of each paycheck into a saving's account, after paying off bills/rent/etc. I can think of a number of people all too well who spend freely because their wallet/purse is itchy, buy something and throw it to the side after their fascination/interest fades. Instant gratification is addicting. That's why a huge number of Americans are in debt, they have no self-control or discipline with regards to this.
Author spookie Posted February 26, 2012 Author Posted February 26, 2012 Personally, my definition is: 1. Having a long-term plan (retirement, investments, property etc) 2. Having enough savings not to sweat losing a job for at least 6 months w/o dipping into retirement savings Financial independence is a given, and of course, it is easier to manage to #2 w/ less debt and lower monthly expenses. I expect older people (30s +) to have more savings and a better understanding of their finances. Personally, I feel like I'm on the right track with a good job, no debt, and some savings, but I still don't feel totally stable. I could definitely survive for a few months without a job, but I'd feel the need to pinch pennies and I'd be very worried about the future. I feel like I should have more money stashed away, and a better understanding of investments. I also feel like I should be watching the housing market closely; I am probably getting ripped-off on my rent. However, compared to most people my age, I know I'm doing alright. and I expect at least the same from my SO.
Eternal Sunshine Posted February 26, 2012 Posted February 26, 2012 I think johan's description is reasonable. I don't bring it 100% to the table but am very close to and something I strive for.
Imajerk17 Posted February 26, 2012 Posted February 26, 2012 I agree with johan's definition. That said I don't think not being financially stable makes one undatable. People who are medical students for example are doing something productive with their lives IMO but they are financially very unstable.
setsenia Posted February 26, 2012 Posted February 26, 2012 A lot of women associate "stability" with an older man, but not necessarily. Stable could mean he/she owns their own place or has a secure job that pays a decent living with minimal debt.
Star Gazer Posted February 26, 2012 Posted February 26, 2012 Which part? I think I just gave a longer description of "living within your means." Being able to survive on your standard of living for several months without drawing down savings AND having little debt other than a mortgage. Using that definition, someone with enough income to maintain one's quality of living for 9 months who has a car payment and student loans wouldn't be considered financially stable. I think that's kinda crazy. I don't know a single person who meets your definition other than Skiman, who's annual income is in the 7 figures.
Star Gazer Posted February 26, 2012 Posted February 26, 2012 Personally, my definition is: 1. Having a long-term plan (retirement, investments, property etc) 2. Having enough savings not to sweat losing a job for at least 6 months w/o dipping into retirement savings That makes sense to me.
johan Posted February 26, 2012 Posted February 26, 2012 Being able to survive on your standard of living for several months without drawing down savings AND having little debt other than a mortgage. Using that definition, someone with enough income to maintain one's quality of living for 9 months who has a car payment and student loans wouldn't be considered financially stable. I think that's kinda crazy. I don't know a single person who meets your definition other than Skiman, who's annual income is in the 7 figures. I said not draw down savings too far. I didn't say not draw down savings at all. If you have a car payment, a mortgage, and student loans, and losing your job would put you in danger of wiping out your savings in a short amount of time, I don't see how you can claim to be financially stable. You can be financially responsible and still not have achieved stability. I fit my description. Most people I know do. I don't think you need to make seven or even six figures to do it.
carhill Posted February 26, 2012 Posted February 26, 2012 What does financial stability mean to you? Not allowing money to rule my life. Is it an equation based on salary, bills, and savings? I like that many people have an equation and I don't fit it. If so, what do you consider to be "financially stable"? Having food for the cat. Is it contingent on age? Dying broke is OK unless one wishes to smile about the vultures, er... heirs, fighting over the remains. In that case, plan for just enough to drive them crazy. Do you require your partner to be financially stable? Non-comatose is fine. Buying me a burger once in awhile is a bonus. Is it something you bring to the table? I'll never admit to it. I lived Johan's rules, which I respect as sensible, for decades. Fµck that. I'm going to die with a smile on my face and broke. 3
Star Gazer Posted February 26, 2012 Posted February 26, 2012 I said not draw down savings too far. I didn't say not draw down savings at all. If you have a car payment, a mortgage, and student loans, and losing your job would put you in danger of wiping out your savings in a short amount of time, I don't see how you can claim to be financially stable. You said "draw down" savings, not wipe it out, and "several months," not a short amount of time.
johan Posted February 26, 2012 Posted February 26, 2012 You said "draw down" savings, not wipe it out, and "several months," not a short amount of time. Is this what it's like talking to you in real life? Should I have said "henceforth" and "wheretofore the above-mentioned shall have achieved said financial stability"? "As per"? Does that help? 1
Mutant Debutante Posted February 26, 2012 Posted February 26, 2012 Ok, SG can be a bulldog. But, uh, she's right. So what about you? Is it really so hard for you to say hey, I didn't write exactly what I meant the first time?
threebyfate Posted February 26, 2012 Posted February 26, 2012 A synonym of financially stable is solvent. The definition of solvent is that your assets exceed your liabilities.
Author spookie Posted February 26, 2012 Author Posted February 26, 2012 A synonym of financially stable is solvent. The definition of solvent is that your assets exceed your liabilities. In our credit-based economy, I don't think that definition holds, unless you consider the present value of future earnings to be an asset.
threebyfate Posted February 26, 2012 Posted February 26, 2012 In our credit-based economy, I don't think that definition holds, unless you consider the present value of future earnings to be an asset.Do you mean debt-based economy? Just throwing out the dictionary definitions. If people want to change the definitions, that's completely up to them. Doesn't mean that it's an accurate representation of their financial situations. It's like saying, Angela calls this fruit a strawberry but by dictionary definition, it's a watermelon. She prefers strawberry because they can't grow strawberries in her climate.
carhill Posted February 26, 2012 Posted February 26, 2012 Well, credit cards (the predecessors of the 'plastic' ones) have been around since the 40's and credit (loans, etc) have been around since the dawn of recorded history, so perhaps we use (and abuse) credit more now than in the past but it's always been around, at least long before most LS'ers were born. As a sign of the past, where the excesses of society imploded the financial markets at the beginning of the Depression, I recall helping clean out my uncle's house after he died unexpectedly and found thousands of dollars in cash literally in his mattress, not uncommon for people who survived that era. I think TBF's simple explanation has a lot of traction. Also, it can be healthy to risk financial instability with a goal in mind, like, as an example, a young medical student going upside down financially to finance his/her future career. The same applies with a business owner who takes risks. Is it always wise? Nope. Each situation is different. Using TBF's criteria, I've been 'solvent' since about age ten. Kinda boring, actually.
Author spookie Posted February 26, 2012 Author Posted February 26, 2012 Do you mean debt-based economy? Just throwing out the dictionary definitions. If people want to change the definitions, that's completely up to them. Doesn't mean that it's an accurate representation of their financial situations. It's like saying, Angela calls this fruit a strawberry but by dictionary definition, it's a watermelon. She prefers strawberry because they can't grow strawberries in her climate. Yes, debt-based economy. I think that "solvent" as a synonym for "financially stable" is flawed, but the misrepresentation goes both ways. stable - able or likely to continue to last I am "solvent" in that I have 0 debt, but I don't feel like my assets (savings) are high enough for me to be stable. I could not afford my lifestyle beyond a few months if I lost my job. In contrast, my parents have a high level of debt thanks to their mortgage, but also enough savings to cover their bills for at least a few years. I am solvent, but they are more stable.
threebyfate Posted February 26, 2012 Posted February 26, 2012 Yes, debt-based economy. I think that "solvent" as a synonym for "financially stable" is flawed, but the misrepresentation goes both ways. stable - able or likely to continue to last I am "solvent" in that I have 0 debt, but I don't feel like my assets (savings) are high enough for me to be stable. I could not afford my lifestyle beyond a few months if I lost my job. In contrast, my parents have a high level of debt thanks to their mortgage, but also enough savings to cover their bills for at least a few years. I am solvent, but they are more stable.Argue with the dictionary! As far as your parents having a mortgage, are you suggesting they have no equity in their home that exceeds the balance of their outstanding mortgage? That they have an upside-down mortgage? NAV!
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